Rs. 1,76,000,00,00,000 Swindle For All Of Us To Ponder

December 6, 2010

India has been hit by a tsunami of the scams in the past few months. Even as the nation was coming to terms with the shameless abuse of public money in the Commonwealth Games scam, the sheer size and scale of scam in 2G Spectrum allocation has left the country dumb struck. The audacity of the Former Telecom Minister in brazenly throwing all rules to winds, presiding over the allocation to spectrum – country‘s precious resources – to dubious companies – who then went on to make Crores of profits by simply reselling these licenses to these foreign companies.

The telecom sector has always been notorious for its scams — with ministers like Sukhram, Pramod Mahajan and now A Raja. It’s been a sector where dubious decisions and brazen corruption have always ruled. Way back in 1995, as a 31 year old telecom entrepreneur, I had my share of run-ins with Ministers and Regulators including with the then Telecom Minister Sukhram who invited me for a meeting where he hinted that a bribe needs to be paid. When I failed to see the point, Sukhram asked in desperation, “Isn’t there any older person in your house whom I can talk to?’ Sukhram went on to spike my application for licenses in a few circles.

The debate on 2G scam has consumed reams and reams of newsprint and countless hours of TV time and the most tragic aspect being that the focus on debate on 2G Scam has turned political killing any meaningful discussion to identify colluders in the scam and fixing the faulty system that allowed the loot.

There are several aspects in the 2G scam, but I will address two things that are bothering the citizens of India the most. One, how do we recover the money swindled in the 2G scam and two, what needs to be done to ensure such a scam will not happen in the future.

As it has now been reported and much debated, it is calculated that loss to government suffered due to the fault ridden First Come, First Served basis for 2G spectrum allocation was Rs. 1,76,000 crores. Simply put, this money – Rs. 1,76,000 crores – belongs to the people of India but went into the pockets of colluders in the swindle that includes the Minister, officers, regulators and the beneficiaries who connived in this crime against nation.

Coming to the debate of how to recover this swindled money and how to prevent such loot in the future, there are three options to recover money looted from the nation. One, government should not only order forfeiture of the licenses of the erring companies besides making the existing players with excess spectrum pay up at market rates. Two, the government must impose a windfall tax on companies who have made money. Three, the government can cancel all the licenses, take back the spectrum, and sell it at market rates and recover the entire value that was lost.

Now, on what needs to be done to prevent such scams in the future. Scams of such magnitude and scale cannot happen without the active collusion and connivance of Minister, bureaucrats, regulators and the beneficiaries. First, the focus must now be to treat this as a crime and investigation launched under the supervision of the Supreme Court to identify ALL the perpetrators and prosecute them under the law. Second, the institution of independent regulators must be reviewed so that they don’t become passive onlookers to crimes being committed and third, abolishing of all discretionary powers of the Ministers that allows them to indulge in corrupt practices.

Can we see the Manmohan Singh, who as the Finance Minister in the 90s, initiated bold economic reforms that unshackled India and paved way for progress, do the same and reform the Telecom sector? Do the Prime Minister and the Government have the courage to take action against the perpetrators of this while collar crime committed against one billion Indians?